Equity Analysis /
Australia

AU : South32 - Reasonable Q4 in tough environment

    Adrian Prendergast
    Adrian Prendergast

    Senior Analyst - Mining and Energy

    Follow
    CGS-CIMB
    25 July 2022
    Published byCGS-CIMB

    After falling 27% in 3 months, and global growth fears still lingering, we see now as an opportune time to add to S32 positions. Trading at a 40% discount to our target price and with an ~18% FCF yield and expected 7.9% FY22F div yield. 4Q22 was a mixed quarter for S32 operationally. Strong performances once again from Cannington and Worsley, while Illawarra and Cerro Matoso both underperformed expectations. We maintain an Add rating and A$6.00 target price (was A$6.10).